While comparing different Forex brokers, you may discover that some state that they are regulated by the Mwali International Services Authority (MISA).
This guide explains what traders should know about the Mwali International Services Authority. But the most important thing to know is that MISA is not a real regulator.
What is the actual, legitimate regulator in Mwali?
Mwali belongs to the Union of Comoros. The legitimate financial regulator for the Union of Comoros, including Mwali, is La Banque Centrale des Comores (the Central Bank of Comoros). This is important context for understanding what we will discuss below.
You should also note that Mohéli is another name for Mwali.
Is MISA a legitimate regulator?
At first glance, MISA might appear to be a legitimate regulator, but a deeper exploration reveals otherwise.
This matter was first drawn to our attention by FinTelegram News. The post, dated August 2023, states that there is a "rising trend" of platforms claiming that MISA is their regulator.
The FinTelegram News post, in turn, pointed us toward another one from Behind MLM, which reported in 2021 that MISA is fake.
Behind MLM dug into the domain registration information for the MISA website, and discovered that it is hosted on GoDaddy, and is registered privately (not by a government agency). Unlike, the Central Bank of Comoros' website, which is using the Internet country code top-level domain for Comoros (.km), MISA's website is using a generic .com domain for its website.
If you visit the website, you will see that it is not very professional-looking.
The design is questionable, for starters. However, to be fair, we have also found authentic regulators with poor site design as well.
Here is what it says in huge letters at the top of the homepage:
Frankly, the exclamation point at the end is another hint that this is not a legitimate regulator. Government entities rarely write in such an exuberant way. They try to write in a more professional tone.
You can find other issues as you explore the site too. The "About" page, for example, does not tell you anything about MISA. It just talks about the island of Mwali.
Furthermore, MISA claims to have a banking license sold by Mohéli Corporate Service. Behind MLM investigated Mohéli Corporate Service, and found further proof of fraudulent activity.
Behind MLM explains:
Mohéli Corporate Service's rosy portrayal of Mwali's non-existent regulatory issues is patently false. As per an advisory issued by the Central Bank in 2014, it does not issue banking licenses for offshore banking activities.
Seeking confirmation of its suspicions, Behind MLM contacted the Central Bank directly. They asked them about Moheli Corporate Service and MISA. Here is the answer they received from the Central Bank of Comoros:
Mwali International Services Authority Register of Companies is a fictitious entity, without any real existence in the territory of the Union of the Comoros.
(It) has no legitimacy, no legal basis or authorization allowing it to issue licenses to companies operating in the banking sector and financial.
The Central Bank of Comoros is the one and only authority empowered to do so in the three islands (Anjouan, Mohéli and Grande Comore).
The Central Bank of Comoros has also published a public notice about MISA, confirming that it is not a legitimate regulator. It states the following (in translation):
The Central Bank of Comoros also draws public attention to the following fictitious structures, which claim to issue licenses to banks and financial establishments in the Union of the Comoros.
It then lists Mwali International Services Authority right at the top of the list.
So, that is two direct statements from the Central Bank of Comoros that MISA is not a real regulator, and has no true authority.
Responsibilities
MISA has no formal responsibilities as a regulator for the simple reason that it is a fictitious entity. It has no true legal authority, and no role to fill in government.
On its site, MISA describes its responsibilities as protecting the "interests and investments of our clients and to maintain the trust and integrity of our financial services sector."
Who should register?
Were MISA a real regulator, then we would advise a wide range of entities to register with them, such as brokers, investment firms, administrative service companies, and so on.
But as MISA is not a real regulator, nobody should register with them. Doing so either demonstrates ignorance on the part of the company, or an intent to mislead customers. Neither is a good sign for traders. Financial businesses should register with a real government authority, whether in Mwali or elsewhere.
Registration and compliance requirements
If, for whatever reason, a company decides it wants to register with this fictitious entity, it can find a list of all the applications on this page. There are applications for banking, trusts, insurance companies, and gambling companies. Which of these is intended for Forex brokers is not entirely obvious. Looking through the application can give you an idea what the requirements are.
Again, remember that MISA is not a real regulator. Registering successfully with MISA is not the same thing as registering with the Central Bank of Comoros.
Companies that would like to register with the Central Bank of Comoros need to look up the registration and compliance requirements for the Central Bank. This can be done at the official website of the Central Bank.
Powers at MISA's disposal
MISA has no powers at its disposal, since it is not an official government entity. Its rights are the same as any other company; it has no legal authority.
That means that MISA cannot do any of the following activities in any legal, formal capacity:
- Issue warnings.
- Suspend licenses.
- Impose penalties.
- Prohibit professional activities.
- File a case in court.
In theory, MISA can do the following:
- Suspend the registration of a company, or revoke their registration (note that this refers only to their MISA registration, not their registration with the Central Bank).
- Arbitrate disputes.
Revoking the MISA registration of a company is not much of a penalty, considering that it is a registration with a fictitious entity.
Just as MISA cannot grant a real legal registration with the Central Bank, it also cannot take away a registration with the Central Bank.
So, as a trader, if you have a dispute with a broker that is only regulated by MISA, you cannot expect much assistance.
MISA cannot put real legal pressure on the broker the way that the Central Bank could. And that assumes they bother to exert any pressure at all.
Conclusion
Now you know what the deal is with the Mwali International Services Authority (MISA). While some brokers claim to be regulated by MISA, this organization is not a real government authority. The only true regulator in Mwali is the Central Bank of Comoros.
It is up to you if you decide to trade with a broker that is registered with MISA instead of a real government authority. They may or may not be out to scam you. Just be aware that if something goes wrong, you will not have the same level of protection you would be able to fall back on if they were regulated by a true government authority.
